INDUSTRIAL AND ECONOMIC REVOLUTIONS 105
Karl Marx
Born in Trier, Prussia, in 1818,
Karl Marx was the son of a
lawyer who had converted
from Judaism to Christianity.
Marx studied law but became
interested in philosophy, in
which he gained a PhD from
Jena University. In 1842,
Marx moved to Cologne and
started work as a journalist,
but his socialist views soon
led to censorship, and he fled
to Paris with his wife, Jenny.
It was in Paris that he met
the German-born industrialist
Friedrich Engels, with whom
he wrote the Communist
Manifesto in 1848. He moved
back to Germany briefly the
following year, but when
the revolutions were quashed,
he left for London, where he
spent the rest of his life.
There, he devoted his time
to writing, notably Capital,
and died in poverty in 1883,
despite continual financial
assistance from Engels.Key works1848 Manifesto of the
Communist Party (with
Friedrich Engels)
1858 Contribution to the
Critique of Political Economy
1867, 1885, 1894 Capital: A
Critique of Political EconomyIn 1959, Fidel Castro’s revolutionaries
seized power in Cuba. At first primarily
a nationalist revolution, it soon became
a communist one when Castro allied
himself with the Soviet Union.
In contrast to his exhaustive
analysis of capitalism, Marx wrote
relatively little about the details of
the communist economy that
would replace capitalism, except
that it should be based on common
ownership and a planned economy
to ensure matching supply and
demand. Insofar as it removed
all the iniquities and instability
of capitalism, he regarded
communism as the culmination
of a historical progression. His
criticism of the capitalist economy
was met, unsurprisingly, with
hostility. Most economists at the
time saw the free market as a
means of ensuring economic
growth and prosperity, at least for
a certain class of people. But Marx
was not without his supporters,
mainly among political thinkers,
and his prediction of communist
revolution proved correct—
although not where he expected,
in industrialized Europe and
America, but in rural countries
such as Russia and China.
Marx did not live to see the
establishment of communist states
such as the USSR and the People’s
Republic of China, and he could not
have envisaged the reality of how
inefficient such planned economies
would be. Today, only a handful of
communist-planned economies
(Cuba, China, Laos, Vietnam, and
North Korea) have survived. There
is debate over just how “Marxist”
the communism of these states
was under the leadership of the likes
of Stalin and Mao, but the collapse
of communism in the Eastern bloc
and the liberalization of the
Chinese economy have been seen
by many economists as evidence
that Marx’s theories were flawed.Mixed economies
In the decades following World
War II Western Europe developed
a “third way” between communism
and capitalism. Many European
Union states still operate mixed
economies with varying degrees of
state intervention and ownership,
although some, most notably Great
Britain, have moved away from
mixed economies toward a more
laissez-faire economic policy,
where the state plays a smaller
role. However, with communism
largely discredited, and the
collapse of capitalism apparently
no nearer than in Marx’s time, it
would appear that his theory of
capitalist dynamism leading to
crisis and revolution were wrong.
Nevertheless, Marxist economic
theory has maintained a following,
and recent financial crises have
prompted a reappraisal of his ideas.
Increasing inequality, concentration
of wealth in a few large companies,
frequent economic crises, and the
“credit crunch” of 2008 have all
been blamed on the free market
economy. While not going so far
as to advocate revolution or even
socialism, a growing body of
thinkers—not all of them from
the political Left—is taking
elements of Marx’s critique of
capitalism seriously. ■